Technicals

Fibonacci ratios and retracements

In finance, there are certain levels that can be applied to both price and time, although they are more commonly used on prices. These levels, known as Fibonacci retracement levels, include 61.8%, 38%, and 50%. When a reversal begins, these levels are calculated based on the movement's low to high and represented by horizontal lines. They are then interpreted as potential stopping points for counter moves. Interestingly, the Fibonacci ratios were not only used in finance but also by Greek and Egyptian mathematicians, known as the Golden Mean. This ratio was applied in areas such as music and architecture. Additionally, the Fibonacci spiral, which follows natural growth patterns, is a logarithmic spiral.

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